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Taking a Bite Out of Yum! Brands Stock

Today, Yum! Brands Inc. (
YUM
), parent company of such restaurant chains as KFC, Pizza Hut and
Taco Bell, has reported growth in earnings, sales and profit in
all of its divisions, including China, India, Yum! Restaurants
International (YRI) and the U.S., according to an SEC report
filed earlier, representing data for the end of this year's third
quarter.

Yum! reports an earnings per share growth forecast of at least 13
percent for the full year of 2012, or at least $3.24. The
reported earnings per share for the third quarter alone was
$1.00. This figure represents a 25-percent increase in total
earnings per share compared to last year's third quarter.

Yum!'s appealing growth trend was also apparent in its numbers
announced in the second quarter. Tim Jerzyk, Senior Vice
President of Yum!'s Investor Relations reported that there was a
38 percent increase in Yum!'s earnings per share year-to-date
data, compared to the second quarter of 2011.

The company broke several of its records including 2012 emerging
as Yum!'s eleventh consecutive year for delivering at least 13
percent of earnings per share growth, as well as it being its
eighth consecutive year of its dividend yield reaching a
double-digit percentage rate (Yum! reported an 18 percent
increase in its quarterly dividend).

The company's strong international development shows that it
opened 394 new restaurants, 192 in China and 181 in YRI.

In total, Yum! experienced more than $3.6 billion in revenue for
the third quarter, and more than $9.4 billion year-to-date.

Gurus with an Appetite for Yum!

Joho Capital's
Robert Karr
, Caxton Associates'
Bruce Kovner
and Fisher Asset Management LLC's
Ken Fisher
all introduced Yum! to their portfolios in the second quarter.

Karr ended with 276,000 shares which accounted for 3.5 percent of
his portfolio, Kovner at 130,000 shares which made up .47 percent
of his portfolio and Fisher at 395,182 shares which made up .08
percent of his portfolio. The transactions for all three almost
equaled or actually exceeded at least $10 million, traded with an
average price of $69 per share.

Rennaissance Technologies LLC's Jim Simons added 133,300 to his
holding, almost doubling his previous holding and ending with
295,900 shares in the second quarter.

Kentucky-based Yum! is currently trading close to its 10-year
high, at a market price of $70.71. It operates about 38,000
restaurants in more than 120 countries and territories - its
international division alone (YRI) has more than 14,000
restaurants outside of the U.S and China.

This year, Yum! restaurants have taken leaps to increase their
competitive edge against rival brands.

Taco Bell, KFC and Pizza Hut not only released new menu items,
but also revamped promotional initiatives with big-name
endorsements earlier this year.

NFL quarterbacks such as Tim Tebow and Aaron Rodgers have both
partnered with Pizza Hut - Tebow in Pizza Hut's BOOK IT! National
Reading Incentive Program, and Rodgers for promoting Pizza Hut's
new Big Dinner Box. Multi-Grammy Award winner and pop superstar,
Christina Aguilera has also appeared in a public service
announcement for Pizza Hut's World Hunger Relief effort announced
in September.

KFC introduced to the market Original Recipe Chicken Bites in
July, Chicken Littles slider sandwiches in September and Dip Ems
chicken tenders with dipping sauces just yesterday.

Lastly, Taco Bell, in addition to adding Doritos Locos Tacos to
its menu in March and A.M. Crunchwraps in August, has also made
headlines for introducing gourmet bowls and burritos in its
Cantina Bell menu, speculated to have been a move to compete
against Chipotle Mexican Grill Inc. (
CMG
).

With a market cap of $31.66 billion, Yum! Brands maintains a P/E
(ttm) ratio of 21.5, a P/S ratio of 2.5 and a P/B ratio of 14.4.
The dividend yield of total stocks is 73 percent

GuruFocus ranks the company 7 out of 10 in Financial Strength, 8
out of 10 in Profitability and Growth and 5 stars for Business
Predictability.

Yum! is categorized under one Severe Warning sign, indicating an
active asset growth of 10.8 percent a year, which exceeds its
revenue growth rate of 6 percent in the last three years - this
may mean that the company is losing efficiency.

Yum! also upholds four Good Signs, showing a strong Altman
Z-score, a consistent growth in revenue, an expanding operating
margin and a dividend yield close to a two-year high.About
GuruFocus: GuruFocus.com tracks the stocks picks and portfolio
holdings of the world's best investors. This value investing site
offers stock screeners and valuation tools. And publishes daily
articles tracking the latest moves of the world's best investors.
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newsletters sent to
Premium Members
.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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